Planning Commission Deputy Chairman Montek Singh Ahluwalia on Monday denied that Prime Minister Manmohan Singh advocates a cap on CEO salaries in his recent controversial speech to Indian Industry.
"I don't think the PM talked about pay cuts. What he did say is that the corporate sector, if it wants to create a perception that it is a socially responsible stakeholder, it should look at the issue of excessive CEO compensation," Ahluwalia told NDTV news channel on its programme India This Week.
He said what the prime minister said was "not very different from what some of the very industrialized countries are worried about."
"...Ours is a different environment and these are largely family controlled companies. I think what the PM is saying is that the perception of corporate governance requires you to address the fact that when you are yourselves controlling the dominant shareholding, there is an issue of perception.
"I don't think he said that we want to cap salaries. I don't think he said that salaries need to be cut down."
The prime minister's comments, made at a Confederation of Indian Industry (CII) conference on Thursday, were criticised by several leading businessmen who said the market should be allowed to decide salaries.
Ahluwalia also spoke about India's poverty, saying many people were yet to experience prosperity, and that "conspicuous consumption" could alienate the poor.
"I have absolutely no doubt that one of the critical things that we face today is that the media naturally projects the heights of success. And in an environment where there are very large number of people often living in parts of the country where people don't even see the general prosperity, then an exaggerated image of success in some parts of the country - if its combined with what the PM said was ostentation or conspicuous consumption - it can lead to a sense of alienation."